Geithner and Boehner defend their stands on fiscal crisis

WASHINGTON — At a stalemate in their talks to avoid a self-imposed fiscal crisis at the end of this month, the lead negotiators for the White House and congressional Republicans used the Sunday television news shows to defend their respective positions and blame the other side for the impasse.

“Right now I would say we're nowhere, period. We're nowhere,” House Speaker John Boehner, R-Ohio, said on “Fox News Sunday.”

“We've put a serious offer on the table by putting revenues out there to try to get this question resolved,” he said. “But the White House has responded with virtually nothing.”

For the administration, Treasury Secretary Timothy Geithner countered on Fox and four other programs by outlining President Barack Obama's proposals for long-term deficit reduction and insisting that Republicans were blocking compromise by their opposition to letting the Bush-era tax rates on high incomes expire as scheduled by law on Dec. 31. Obama and Democratic lawmakers want to extend the tax cuts on annual household income below $250,000 but not for income above that level, as the president vowed in his re-election campaign.

“There's just no reason why 98 percent of Americans have to see their taxes go up because some members of Congress on the Republican side want to block tax rate increases for 2 percent of the wealthiest Americans,” Geithner said. “Remember, those tax rates, those tax cuts, cost a trillion dollars over 10 years.”

More Information

The “fiscal cliff” is an economy-rattling combination of expiring tax cuts and major across-the-board spending reductions for the Pentagon and domestic programs.

It's the punishment for previous failures of a bitterly divided Congress and White House to deal with the government's spiraling debt or overhaul tax laws. The Congressional Budget Office estimates the austerity program would reduce the deficit by $503 billion through the end of next September, or approaching $700 billion for the entire calendar year. The CBO says millions of jobs could be lost.

The fiscal cliff includes:

The expiration of George W. Bush-era tax cuts on income, investments, married couples and families with children and inheritances. In addition, some 26 million additional people face the alternative minimum tax next filing season, which would raise their taxes by an average of $3,700. Cost through September: $330 billion.

A $55 billion, 9 percent cut in the defense budget next year and another $55 billion in cuts to domestic programs, including a 2 percent cut to Medicare providers.

The expiration of unemployment benefits for the long-term jobless. Cost: $26 billion.

A sharp cut in reimbursements for doctors participating in Medicare. Cost: $11 billion.

A variety of smaller tax cuts for both businesses and individuals, collectively known as tax “extenders.” They include a tax credit for research and development and a deduction for sales taxes in states that don't have an income tax. Cost: about $65 billion.

A need to increase the government's borrowing cap (the so-called debt limit) of $16.4 trillion. The government is expected to hit the cap late this year but the Treasury Department has the authority to juggle certain accounts to buy several more weeks of time so Congress won't have to act until early next year.

Read More

“Those rates are going to have to go up,” he added. “That's an essential part of a deal.”

The televised jousting reflected the political posturing typical in the early stages of Washington budget negotiations, with leaders of each party seeking to persuade the public of the rightness of its position and to bring pressure on the other side to compromise. Geithner gave interviews to all five major Sunday shows, and Boehner in turn requested time on Fox late last week, prompting the network to dump the two senators it had booked.

But the White House and Congress do not have much time for the usual negotiating games, with the year-end deadline looming and the holidays approaching. Absent a deal offering an alternative, across-the-board cuts in domestic and military programs and immediate tax increases for all Americans — the result of the expiration of the Bush-era tax cuts — would take effect in January. Together, the automatic spending cuts and tax increases would cut the deficit for fiscal year 2013 by more than $500 billion, an amount so sudden and large that economists say it would cause a recession. They have called the event the “fiscal cliff.”